S&P 500 ‘Intrinsic Value Index’ Now At $1,842 [CHART]

S&P Intrinsic Value Stands at 1,842 via ValuePlays

“Davidson” submits:

The S&P 500 ($SPY)  Intrinsic Value Index is $1,842. This is the level at which Value Investors historically enter equities as the long term earnings capitalized by the US GDP trend is how many Value Investors assess valuation. The recent swoon as a result of Hedge Fund unwinding hyperinflation bets on oil and commodities due to excess Fed liquidity. Inflation has remained well under 2%(1.7% currently).

utin’s invasion of Ukraine has resulted in a flood of capital into the US, driven down 10yr Treas rates last spring causing them to drop from 3% in  Dec 2013 to 2.5% in May 2014. In turn this caused the US$ to strengthen and liquidation of hyperinflation bets began June 2014-US$ began to strengthen more rapidly as oil and commodities weakened. Today’s equity turmoil is the result as too many had made a bet on what appeared to be a sure thing.

Warren Buffett: If You Own A Good Business, Keep It

Berkshire Hathaway Warren BuffettBuying private businesses is easier than acquiring public firms, and investors should avoid selling good investments at all costs, according to the Oracle of Omaha, Warren Buffett. Q2 2020 hedge fund letters, conferences and more In an interview with CNBC in March 2013, Buffett was asked if he was looking at any businesses, in particular, Read More

One must never underestimate the impact of one-sided thinking when it comes to smart people thinking that they are so ‘really smart’ that they make overly illiquid short term investment decisions.

Long term employment, retail sales and etc continue to signal economic expansion. Equity markets have always tracked economic expansion. After the dust settles, we should expect higher equity markets.

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.